In today’s increasingly globalized world, the economic landscape is constantly shifting. One of the more notable developments is the rise of tariffs and trade wars, with countries tightening borders and adjusting policies to protect local industries. For Canada’s technology business and channel, these changes present both challenges and opportunities. But what do they mean for the future of tech in Canada? What risks and rewards should companies anticipate as the global economy continues to evolve?
The Risks: Rising Costs and Uncertainty
The risks associated with tariffs and trade wars are clear. Tariffs can increase the cost of technology products, materials, and services from international suppliers, putting pressure on affordability and margins. For companies relying on imported hardware, software, or components, trade disputes can lead to higher costs, delays, and market uncertainty. These factors create an environment where strategic planning and long-term investments become more difficult, leading businesses to hesitate on major decisions.
The Opportunities: Innovation and Domestic Growth
However, as with any challenge, there are opportunities for those who can adapt. Trade disputes often push supply chain innovation, forcing businesses to seek alternative solutions. Canada’s tech sector has the potential to harness local expertise, resources, and partnerships, strengthening the domestic market. With the right policies and strategies, Canadian firms can position themselves as leaders in specialized areas of tech, particularly in high-demand fields like artificial intelligence (AI) and sustainable technology solutions. Tariffs and trade wars may provide the necessary push for Canadian companies to rethink their strategies, innovate, and reassert themselves in the global tech marketplace.
The Real Challenge: Uncertainty, Inflation, and High Interest Rates
One of the biggest obstacles facing Canada’s tech sector isn’t just tariffs or trade wars—it’s economic uncertainty. When businesses are unsure about the future, they tend to hold back on investment. This is true in the tech sector as much as in retail or other industries. The looming threat of inflation and high interest rates has only worsened this environment.
Inflation erodes purchasing power, making both consumers and businesses more cautious about spending. High interest rates, meanwhile, make borrowing more expensive, discouraging investment from both corporate entities and startups. Venture capital becomes scarcer, and established firms hesitate to make large-scale moves. In times of uncertainty, businesses often adopt a defensive stance, delaying expansion and slowing innovation. This is the real risk facing Canada’s tech sector—one where waiting for stability may not be the best approach.
Never Waste a Good Crisis
History has shown that crises often create the conditions for transformative change. As Winston Churchill famously said, “Never waste a good crisis.” The ongoing uncertainties surrounding tariffs and trade wars may be difficult, but they also present an opportunity for Canadian technology companies to redefine the way they operate.
This phase of economic tension will either pass or become “priced in” by the market, meaning businesses will adapt, and the impact of tariffs and trade wars will eventually fade into the background. The key for Canadian businesses is to find new ways to operate amidst uncertainty—because waiting it out is not an option.
Just as climate change has become a defining issue of our generation, AI is poised to be the next major wave reshaping industries. The sooner Canada embraces the ethical adoption of AI, the less relevant tariffs and trade wars will become. The key to success lies not in retreating or hoping for better conditions but in moving forward. By forging stronger partnerships, accelerating innovation, and taking bold steps to lead in AI, Canada’s tech sector can emerge stronger, more resilient, and better prepared for the future.
The time to wait and see has passed. Now is the time to move faster.